McDonald's Product & Service Development: Process and Lifecycle

This report explores the product and service development process, focusing on McDonald's as a case study. It details the stages involved in developing new products and services, from idea generation to product launch, and emphasizes the importance of customer integration. The report also examines the product lifecycle stages—introduction, growth, maturity, and decline—and evaluates product line management choices. It further delves into the different levels of products from the customer's perspective, including core, generic, expected, augmented, and potential products. The analysis highlights McDonald's strategies for continuous improvement and adaptation to meet customer needs and market demands. Desklib offers this report and similar resources to aid students in their studies.

PRODUCT AND SERVICE
DEVELOPMENT
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INTRODUCTION
Product and service development refers to the process that includes conceptualization,
design, development and marketing of the product or service. It is a process of taking the
concept of a product or service to market. This report explores the different elements
associated with the product and service development. It elaborates the process involved in
the development of a new product or service. It further demonstrates the life-stage cycle of
the products and service in the portfolio of the company. The importance of innovation,
adaption and renovation of the individual product or service is also described in this work. It
also includes the different elements of design and pitch of a product or service. Reflection
on skills of team working, creative development and presentation are also incorporated I
this work.
The case study of McDonald's is adopted in this report to understand and analyse the
different factors associated with the product and service development. McDonald’s is a
multinational American fast food company which was founded in the year 1940. This work
probe all the different factor associated with the product development of McDonald’s to
make a deep understanding of the concept.
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LO 1
P1 PROCESS INVOLVED IN DEVELOPMENT OF PRODUCTS AND SERVICES
AND LEVELS OF CUSTOMER INTEGRATION
Product or service of an organization plays a significant role in the success of an organization
therefore, it is important for an organization to develop the effective products or services.
The product or service concept is a way in which an organization positions its products or
service in the market in terms of product feature, price, quality, distribution, differentiating
elements etc. The products are tangible and discernible items that are manufactured by an
organization whereas the service is intangible. The elements of product and services of an
organization reflect significantly on the sales and profitability of the company, therefore, it
is important to focus on the development of the effective products and services which can
meet the expectation of the customers (Tukker, A. and Tischner, 2017).
McDonald’s is a leading multinational fast food brand. It is operating its business in more
than 100 countries. The delicious food products are one of the main reasons behind the
success of the company. The key products of McDonald’s such as burger, French fries,
chicken McNuggets and sandwiches are popular among the customers. Company
concentrate on the development of the effective products and services which can meet the
needs and demands of the customers. It focuses on each and every step involved in the
development of its products. The key stages involved in the development of products and
services are:
 Idea generation
 Idea screening and evaluation
 Concept development and testing
 Strategic analysis
 Product development and testing
 Market testing
 Commercialization
 product launch
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Figure1: Stages of product or service development process
[Source: Kuczmarski innovation, 2018]
Idea generation- In this stages an organization focus on the generation of the innovative or
effective idea. Brainstorming is done by the company to generate the various ideas which
can be adopted for the development of a product or service.
Ideas screening and evaluation- After the generation of many ideas a company screen it to
find the most effective idea. An organization probes the different ideas from different angles
to understand its potential to be successful.
Concept development and testing- After selection of the best idea, an organization focus
the development of the concept. The concept is tested to measure is its potential to
become a successful product or service.
Strategic analysis- strategic analysis is an important step in which an organization analysed
the different factors and their impact on the product. The determination of the demand,
cost and profit margin of the product and service is also done in this step (Forsman, et al.
2011).
Product development and testing- In this step prototype product are created to understand
the result which can be achieved through the original product. In this step, different types
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of test are done to understand what changes can be done to make the product more
effective.
Market testing- marketing test are done to understand that to what extent the product is
able to meet the need and demand of the customers. It helps in deciding the best process
and timing for piloting new products and services.
Commercialization- Commercialization of the product or a service is important for
determining the final price for products and marketing plans for it.
Product launch – It is the final step in which a company introduce its product to market
(Beuren, et al. 2013).
McDonald’s consider all these steps to ensure the development of the effective products
which can meet the expectations of the customers.
Levels of customer integration- Customer integration is one of the important components
of customer relationship management. It out the technology in place that its helps customer
to process their own transitions and also indirectly contact with the company. It helps in
reducing the need for the middleman. Effective customer integration can help an
organization in achieving different benefits such as improvement in communication,
customer retention, increasing focus on the business, etc. A company need to focus on the
customer integration in order to meet their expectation and to build a healthy and positive
relationship with them. McDonald's give special emphasis to the customer integration so
that it can develop its product successfully (Beuren, et al. 2013).
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P2 APPLICATION OF PROCESS IN DEVELOPMENT OF SPECIFIC
ORGANIZATIONAL PRODUCT OR SERVICE
There are different processes in the development of the products which should be
considered by an organization to develop the effective products which can meet the
expectations of the customers. McDonald's give focuses on each and every step for the
development of its products.
Right from idea generation to launching of a product McDonald’s consider all the elements
which can influence the development of the product. For example, while development of a
new production company generates various ideas which can be adapted to develop a
product. After generation of the idea company filters the ideas on the basis of the different
factors such as the culture of customers, taste and their health concern. After selection of
the idea develops the concept and test it to measure its potential. McDonald's conducts the
strategic analysis in order to understand the potential of the product. It also gives special
attention to product development and marketing testing. The company develops the
product in small quantity and takes the feedback from the customers. It also develops
effective marketing strategies for the specific product. It also focuses on the effective
commercialization of the product so that it attracts the customers as well as can be
profitable for the company. The company develops an effective marketing plan for the
products to attract the customers. Finally, company launches the product and make it
accessible for the customers (Edvardsson, et al. 2012).
The effective development of the product helps the company in minimizing the impact of
the different risk factor. The company focuses on the all the different factors such as
compatibility, trialability, observability and complexity. It helps the company in overcoming
different risk factors which can influence the success of the product. The appropriate focus
on the different process of the product development help company in avoiding the adverse
impact of the different factors and ensure the success of the product. McDonald's can
consider all these factors in order to achieve development of the effective and better
products to meet the expectation of the customers.(Zaman, et al. 2013).
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P3 LIFE-CYCLE STAGE OF THE PRODUCTS OR SERVICES IN A COMPANY
PORTFOLIO
There are different levels of the products in which a product is seen from the viewpoint of
the customer. These levels indicate the value that customer attaches to a product. The
different levels of products are core product, generic product, expected product,
augmented product and potential product (Vasantha, et al. 2012).
Core product- Core product is a basic product that focuses on the purpose for which
product is formed. For example, the core product is a warm coat whose purpose is to
protect people from cold. One of the important elements of the core product is uniqueness,
therefore, companies like McDonald's focus on making unique products (Stark, 2015).
Generic product- A generic product incorporates only the essential attributes or
characteristics. For example, medicines which include all attributes which are essential for
the treatment.
Expected product- These products incorporate all the attributes which are expected by the
buyers. The expected products meet the different expectation of the customers regarding
colour, quality, quantity etc.
Augmented products – Augmented products are the product which includes all the
additional features, attributes or related service that make the products unique. Augmented
products deliver different benefits such as warranty, colour, taste and good value for
money.
Potential product – The potential products cover transformation and augmentation that a
product may undergo in the future. The potential products are effective in achieving
customer loyalty in future. For example, a software company upgrades its software regularly
to make it more better for the customers (Mascitelli, 2011).
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McDonald's focuses on the development of the food products which can meet all the
expectation of the customers. The key successful products of McDonald's are the burger,
French fries, Chicken McNuggets, happy meals etc. Company focuses on the continuous
improvement of this product to achieve better results. It applies different strategies such as
product standardization and product adoption method in order to develop the products
according to need and demand of the customers.
Kotler’s five product level model helps an organization to structure their product portfolio to
different target customers. Grouping of the product in different product categories that
align with customer segments help in planning sales and new product planning.
PRODUCT LIFECYCLE STAGES
The concept of product lifecycle concerns with the life of a product in the market with
respect to the commercial costs and sales measure. A product goes through different stages
which posse their won characteristics. The four different stages of product lifestyle are:
Figure2: product lifecycle
[Source: Marketing portfolio, 2018]
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Introduction stage – This is initial stage in which a company introduce its product to market.
The sales of the company start to increase gradually and the profit achieved by the company
may be nominal. The company need to promote its products its product and services to
attract the customers to try and buy it.
Growth stage- In this stage, a company experiences the high growth in the sales of the
product. In this stage, a company achieve different benefits such as cost reduction due to
economies of scale, increase in sales volume, the rise in profitability and public awareness.
In this stage, competition begins to increase slightly which can lead to reduction in the price
of the product.
Maturity stage – In this stage, a product gets established in the market and in this company
aims to maintain the market share. In this stage, the cost is reduced due to increase in
production volume and experience curve effect. A product attains the market situation in
this stage. The competition also increases in this stage which leads in reduction of the price.
Decline stage – this is final stage of the product life cycle in which market for a product
shrinks. The sales, as well as profits of a product, start to decline to a significant level. In this
stage, the product can be kept but there must be fewer adverts (Stark, 2015).
It is important for an organization to consider all these stages of the product and should
develop strategies accordingly to achieve the better results in each and every step of the
product development cycle. McDonald's develops effective strategies so that it can achieve
better result in every phase of the products. The effective strategies of the McDonald's help
it in making its products more profitable.
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LO2
P4 EVALUATION OF THE APPROPRIATE PRODUCT LINE MANAGEMENT
CHOICES REQUIRED FOR INDIVIDUAL PRODUCTS OR SERVICES
A product line may be defined as a group of related products sold under a single brand by
the same organization. Companies sell multiple products under many different brands. A
company also focuses on the expansion of their offering by adding to existing product line
(Terpstra, et al. 2012).
It is very important for an organization to focus on the development of the effective product
line. There are different elements associated with the product line management which
should be considered by an organization.
There are various product line management choices which can be considered by an
organization to achieve the better results. Key products line management choice are:
 Standardisation
 Adaption
Standardisation- Product standardization strategy refers to same or uniform
representations of all the different elements associated with the factors such as quality,
ingredients or material used, product name, packaging, regardless of the location of the
world. It is a practice of setting identical attributes for a particular product or service. This
approach is also known as the one size fit all approach (Tan and Sousa, 2013).
It is an effective method to minimize the cost and to increase the quality of the products. By
reducing the difference in the products a company can increase its production, decrease raw
material cost, streamline distribution and reinforce product branding.
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Figure3: Product Standardization of McDonald's
[Souurce: Wordpress, 2018]
McDonald’s adopt product standardization to deliver the uniform product throughout the
world. The example of the standardised product of MacDonald’s are French fries, burger
and coke.
Adoption – A company changes or modify its products in order to adjust according to
different market. It is a marketing strategy where new products are modified according to
the existing products. A company adopt this strategy to meet the expectation of the
customers belongs to specific locations. This strategy is considered as the influential strategy
for the multination national companies (Best, 2012). There are various factors which can
possess a significant impact on the utilization of the adoption strategy. These factors include
target market, product, package and design, ingredients, language, religion etc. It is
important for an organization to consider all these factors in order to achieve better and
desired results by utilizing this strategy.
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Figure4: Example of the product adaption of McDonald's
[Source: WordPress, 2018]
It is imperative for MacDonald’s to consider the strengths as well as weakness of both the
product line management choices in order to adopt effective strategies to meet the need
and demand of the customers in an effective manner (De Mooij, et al. 2013).
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LO4
P6 REFLECTION ON TEAM WORKING, CREATIVE DEVELOPMENT AND
PRESENTATION
Learning or doing any new or important thing always help in probing different aspects of a
topic. During this working, I came across different new and important things which are
important for the personal as well as professional development. I have learned about
different factors which reflect significantly on the personal and professional development.
The three major factors which are important for the personal and professional development
are Team working, creative development and presentation are the crucial elements which
plays an important role in achieving the desired results.
Team working is important for important to achieve the common goals. Teamwork reflects
significantly on the achievement of the different skills. Working in a team is beneficial for
the all the members of team. It helps in developing different skills of an individual which
play an important role in the personal as well as professional life. It helps in learning many
new things which are important for developing knowledge and skills. It helps in developing
communication skill which plays an important role in personal as well as professional life.
Working in a team also helps in developing healthy and positive relationship with others.
Throughout this report, I have learned about all the factors associated with the Creative
development. I have learned that how the creativity can help in solving different problems. I
have also gone through different techniques which can be used to enhance the creativity.
Brainstorming is an effective technique which can help in generating creative idea to
develop effective techniques to solve the different problems which can influence the
personal and professional development.
I have learned about the factors which should be considered for the development creative
development. During this assignment, I have learned about that how the development of a
product or service takes place. What are the strategies which can be developed to develop
the better products which can meet the expectation of the customers?
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One of the important skills which I have learned through this assignment is presentation
skills. There are different factors which contribute significantly to an effective presentation.
I have learned about the different things which should be considered to deliver an effective
presentation. Eye contact, simplicity, expressive body language, knowledge of topic,
preparation, use of examples are the important element which reflects significantly on the
effectiveness of the presentation. Teamwork is one of the important element which should
be considered by delivering a team presentation. I have considered all these elements to
deliver a better and effective presentation.
Although It was a great experience as I have learned about many important things still I
believe that it could be better. I need to focus on the different skills such as listing skills,
communication skills in order to achieve better results. I would focus on the feedbacks of
other for the improvement in my skills and knowledge in order to garnish my personal and
professional life.
There are various issues and which can be considered to make the recommendation for the
improvement. There are different issues such as communication problem, problem-solving,
and mismanagement of the activities which should be resolved to achieve the effective and
better results.
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CONCLUSION
Product and service development is an important element which reflects significantly on the
success of the organization. It is imperative for a company to develop effective products
which can meet the expectations of the customers. A Company should concentrate on the
development of the effective products and services which can meet the needs and demands
of the customers. It should focus on each and every step involved in the development of its
products. The key stages involved in the development of products and services are idea
generation, Idea screening and evaluation, Concept development and testing, Strategic
analysis, Product development and testing, Market testing, Commercialization and product
launch. There are different levels of the products in which a product is seen from the
viewpoint of the customer. The four different stages of product lifestyle are introduction,
growth, maturity and decline. A product line may be defined as a group of related products
sold under a single brand by the same organization It is very important for an organization
to focus on the development of the effective product line. It may be concluded that a
company should pay attention to all the factor associated with the product and service
development in order to achieve organizational objectives.
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REFERENCES
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 Zaman, S., Selim, N. and Joarder, T., 2013. McDonaldization without a McDonald's:
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